📊 COST Key Takeaways
Is Costco Wholesale Corp. /New (COST) a Good Investment?
Costco demonstrates exceptional financial health with fortress-like balance sheet metrics (0.18x debt/equity, 74.5x interest coverage) and strong cash generation (4.9B FCF), though revenue growth has stalled at 0% YoY. The company's operational excellence is evident in high ROE (12.6%) and robust free cash flow conversion (3.6% FCF margin), providing a solid foundation despite current growth headwinds.
Costco shows high-quality fundamentals built on consistent profitability, strong free cash flow generation, and a very conservative balance sheet with low leverage and ample cash. While the latest period shows flat revenue and net income, the business still converts sales efficiently for a low-margin retailer and maintains exceptional financial resilience, supporting a favorable long-term fundamental view.
Why Buy Costco Wholesale Corp. /New Stock? COST Key Strengths
- Exceptional balance sheet strength with minimal leverage (0.18x debt/equity) and substantial cash reserves (17.4B)
- Excellent cash flow generation with 4.9B free cash flow and strong operating cash flow of 7.7B
- High return on equity (12.6%) and return on assets (4.8%) demonstrating capital efficiency
- Outstanding interest coverage ratio of 74.5x indicating minimal financial distress risk
- Strong balance sheet with $17.38B in cash, low debt/equity of 0.18x, and very high 74.5x interest coverage
- Reliable cash generation with $7.68B operating cash flow and $4.87B free cash flow
- Solid profitability for a scale retailer, including 12.0% gross margin, 3.7% operating margin, and 12.6% ROE
COST Stock Risks: Costco Wholesale Corp. /New Investment Risks
- Revenue growth stalled at 0% YoY suggesting operational challenges or market saturation
- Low quick ratio (0.59x) and tight current ratio (1.06x) may indicate working capital constraints
- Thin net margin (2.9%) and low gross margin (12.0%) limits profitability cushion in competitive retail environment
- EPS growth (+10% YoY) outpacing revenue growth (+0% YoY) is unsustainable without revenue acceleration
- Latest period revenue and net income were flat, which may indicate slower near-term growth momentum
- Thin retail margins leave limited room for cost inflation, wage pressure, or merchandising disruption
- Quick ratio of 0.59x means liquidity depends heavily on steady inventory turnover and operating execution
Key Metrics to Watch
- Revenue growth trajectory and comparable store sales trends
- Net margin expansion potential and operating leverage realization
- Free cash flow sustainability and capital allocation decisions
- Working capital management to improve liquidity ratios
- Revenue and comparable-sales growth
- Operating margin and free cash flow trend
Costco Wholesale Corp. /New (COST) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 3.6% FCF margin may limit capital allocation flexibility.
COST Profit Margin, ROE & Profitability Analysis
COST vs Consumer Sector: How Costco Wholesale Corp. /New Compares
How Costco Wholesale Corp. /New compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Costco Wholesale Corp. /New Stock Overvalued? COST Valuation Analysis 2026
Based on fundamental analysis, Costco Wholesale Corp. /New has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Costco Wholesale Corp. /New Balance Sheet: COST Debt, Cash & Liquidity
COST Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Costco Wholesale Corp. /New's revenue has grown significantly by 40% over the 5-year period, indicating strong business expansion. The most recent EPS of $14.16 reflects profitable operations.
COST Revenue Growth, EPS Growth & YoY Performance
COST Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $63.7B | $1.8B | $4.02 |
| Q1 2026 | $62.2B | $1.8B | $4.04 |
| Q3 2025 | $58.5B | $1.7B | $3.78 |
| Q2 2025 | $58.4B | $1.7B | $3.92 |
| Q1 2025 | $57.8B | $1.6B | $3.58 |
| Q3 2024 | $53.6B | $1.3B | $2.93 |
| Q2 2024 | $55.3B | $1.5B | $3.30 |
| Q1 2024 | $54.4B | $1.4B | $3.07 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Costco Wholesale Corp. /New Dividends, Buybacks & Capital Allocation
COST SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Costco Wholesale Corp. /New (CIK: 0000909832)
📋 Recent SEC Filings
❓ Frequently Asked Questions about COST
What is the AI rating for COST?
Costco Wholesale Corp. /New (COST) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 81% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are COST's key strengths?
Claude: Exceptional balance sheet strength with minimal leverage (0.18x debt/equity) and substantial cash reserves (17.4B). Excellent cash flow generation with 4.9B free cash flow and strong operating cash flow of 7.7B. ChatGPT: Strong balance sheet with $17.38B in cash, low debt/equity of 0.18x, and very high 74.5x interest coverage. Reliable cash generation with $7.68B operating cash flow and $4.87B free cash flow.
What are the risks of investing in COST?
Claude: Revenue growth stalled at 0% YoY suggesting operational challenges or market saturation. Low quick ratio (0.59x) and tight current ratio (1.06x) may indicate working capital constraints. ChatGPT: Latest period revenue and net income were flat, which may indicate slower near-term growth momentum. Thin retail margins leave limited room for cost inflation, wage pressure, or merchandising disruption.
What is COST's revenue and growth?
Costco Wholesale Corp. /New reported revenue of $136.9B.
Does COST pay dividends?
Costco Wholesale Corp. /New pays dividends, with $1,154.0M distributed to shareholders in the trailing twelve months.
Where can I find COST SEC filings?
Official SEC filings for Costco Wholesale Corp. /New (CIK: 0000909832) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is COST's EPS?
Costco Wholesale Corp. /New has a diluted EPS of $9.08.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is COST a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Costco Wholesale Corp. /New has a BUY rating with 81% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is COST stock overvalued or undervalued?
Valuation metrics for COST: ROE of 12.6% (sector avg: 18%), net margin of 2.9% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy COST stock in 2026?
Our dual AI analysis gives Costco Wholesale Corp. /New a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is COST's free cash flow?
Costco Wholesale Corp. /New's operating cash flow is $7.7B, with capital expenditures of $2.8B. FCF margin is 3.6%.
How does COST compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 2.9% (avg: 8%), ROE 12.6% (avg: 18%), current ratio 1.06 (avg: 1.5).